Do You Take This Man to Be Your Business Partner?
In our latest podcast episode, three women CEOs explain how they run a business with a partner to whom they also happen to be married.
Good Morning!
Here are today’s highlights:
The job market has cooled but some candidates are still getting signing bonuses.
Gene Marks says it takes less than 20 minutes to fill out the Corporate Transparency Act form.
A New York Times columnist thinks he’s found a better email service.
A private equity billionaire who buys small businesses says he’s not like those other private equity billionaires.
THE 21 HATS PODCAST
This week, Liz Picarazzi, Jaci Russo, and Laura Zander talk about what it’s been like building a business in partnership with a spouse, and they all agree on some important things. For one, they all say that, had their husband been just another employee, he probably would have been fired. All three say that in their relationships, they are the gas that drives the business, and their husband is the brake that sometimes keeps them out of trouble and sometimes frustrates their entrepreneurial instincts.
"And all three agree that some things are best left undiscussed. For example, says Jaci: “Michael doesn’t even know what we make. He also doesn't know what any of the employees make.” But the three CEOs also agree on this: In the final cost-benefit analysis, they wouldn’t want to build a business any other way.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
HUMAN RESOURCES
Employers are still competing for talent, according to a new survey from ZipRecruiter: “About 23 percent of those who got a new job within the past six months said they got a signing bonus, down from 29 percent in the previous quarter. Meanwhile, 24 percent of workers said they received a counter-offer from their previous employer, up from 21 percent. The United States gained 303,000 jobs in March, beating expectations as the economy added jobs in sectors like health care and leisure and hospitality. That drove the unemployment rate to 3.8 percent — near historic lows and one of the longest prolonged streaks of low unemployment in the past half century. Unemployment has hovered between 3.7 percent and 3.9 percent since August.”
“Leslie Loveless, CEO at Slone Partners, a nationwide executive recruiting firm that serves health-care and biotech-related clients, said 2024 is a better job climate than 2023, when many companies were focused on cutting costs and, thus, laying off workers. But when it comes to top-tier talent, companies are always competing.”
“Loveless said signing bonuses are usually offered when a prospective employee has earned a bonus elsewhere and is hesitant about leaving their current job until they've gotten it. The company recruiting them often offers a bonus to make up for that loss and get the employee on board quicker — part of the reason why signing bonuses are still offered, even in a softer job market.” READ MORE
Silicon Slopes is booming: “Salt Lake City was the country’s hottest job market in 2023, followed by three cities in Florida: Jacksonville, Orlando and Tampa. Miami also made the top 10, making Florida the top state last year. The Mountain West and Sunbelt cities bucked the trend in a year marked by layoffs in the technology, manufacturing and financial sectors. Workers flocked to these areas for their plentiful job opportunities, wage growth, affordability and recreational offerings.”
“For over a decade, Salt Lake City has attracted white-collar workers from the San Francisco Bay Area and Los Angeles. Many of the workers have taken jobs in Salt Lake City’s tech hub, aptly referred to as ‘Silicon Slopes.’ They have also been able to buy homes after being priced out of California cities.”
“This migration increased after the pandemic, drawing in young workers with a deepened desire for easy access to the great outdoors. ‘There’s a virtuous cycle where young, highly educated workers are moving into Salt Lake City and bringing in more money to that area,’ said Adam Kamins, an economist at Moody’s Analytics.”
“Friendly business laws and tax incentives have also made Salt Lake City a good place to build and expand businesses in other industries, said Jill Perelson, founder and chief executive of recruiting agency PrincePerelson & Associates. High-growth industries in Salt Lake City include life sciences, manufacturing and supply-chain logistics. ‘There is so much land here that manufacturing and logistics companies can expand into the desert and beyond,’ said Perelson.” READ MORE
REGULATION
Gene Marks wants to know why everyone is freaking out about the Corporate Transparency Act: “The law was passed as part of the National Defense Authorization Act back in 2021 — before President Biden even took office. Its intention is to root out potential bad actors and terrorists who own corporate entities in the U.S. In order to comply with the act, existing businesses and startups are required to report their ‘beneficial owners’ (those that generally either own a significant number of shares or exert significant influence over the operations) of the entity to the Financial Crimes Enforcement Network by the end of this year. Failure to report could result in fines of as much as $10,000.”
“Both the National Small Business Association and the Small Business Association of Michigan filed lawsuits challenging its constitutionality. ‘[The act] unlawfully authorizes the search and seizure of the sensitive, personal information belonging to millions of innocent small business owners and employees without any suspicion of wrongdoing,’ says the Michigan group. ‘[It] exceeds the bounds of Congress’ legislative authority. Congress may only legislate within the specific powers granted to it in the Constitution. None of these powers give Congress the authority to enact the [act].’”
“While the Michigan suit is still in progress, the NSBA’s suit so far has been successful — a federal judge struck down the law just a few weeks ago. Some business owners think that’s the end of that. But not so. Because the lawsuit was not a class action it impacts only the approximately 65,000 members of the organization. The Treasury Department has vowed to carry on with the filing requirement for everyone else and is appealing the judgment.”
“Is the act unconstitutional? There’s plenty of debate. But that issue aside, many small business owners are upset about reporting their beneficial owners and for the usual reasons: government overreach, privacy concerns, more compliance, and more costs. I’m a small business owner and I don’t have these concerns.”
“Regarding compliance, it’s kind of a non-issue. Unlike more than a million business owners who have already done so, I have yet to fill out my form. But I will. And I’ll be helping clients do the same. It takes less than 20 minutes. Some business owners who own multiple shell companies may find themselves or their accountants spending more time. But what’s with all those shell companies anyway? Hmm…” READ MORE
It’s not just American companies that complain about red tape: “Freedom from red tape has been a rallying cry for farmers from Poland to Portugal at recent protests against European Union laws and policies. Indeed, the burden of bureaucracy is a general complaint of corporate executives across the globe. But nowhere is the issue more pressing than in Germany, Europe’s largest economy, which is facing anemic growth of no more than 0.2 percent this year. In a report last month, the International Monetary Fund called ‘too much red tape’ one of the major impediments to reviving the German economy.”
“For example, it takes 120 days to obtain a business license in Germany — more than double the average in other Western economies. Germany also lags behind the rest of the European Union in the digitization of government services, still requiring written forms for certain tax refunds and building permits.”
“‘We now have such a high workload that we need more and more people to master the bureaucracy,’ said Claus Paal, president of the Stuttgart Chamber of Commerce and Industry, who runs a packaging company. ‘But these are qualified people who would actually be much better off in production than writing reports or filling out statistics.’”
“The red tape drain on time and resources is felt especially by small and midsize firms — those with fewer than 500 employees and annual revenue below €50 million (about $54 million) — that are the backbone of the German economy. These businesses often lack in-house legal departments dedicated to filing audits, recording statistics and deciphering which information is wanted by which authorities — the European, federal, state and local governments.”
“Even Germany’s chancellor, Olaf Scholz, has publicly acknowledged that the demands have become too much. ‘We have reached a situation where, in many places, no one can carry out all of the laws that we have created,’ Mr. Scholz said last month.” READ MORE
MANAGEMENT
Ezra Klein, a New York Times columnist, explains why he’s dumping Gmail in favor of 37signal’s email service, Hey: “Gmail and virtually all of its competitors assume anyone should be able to email you and then you should store and sort and search and categorize those messages. Hey assumes that only the people you want email from should be able to email you. The first time anyone sends you a message, it goes into what’s called the Screener, and you have to whitelist or blackball the sender. If you blackball the sender, that’s it. You never see email from that address again. It also has another feature I love: a clean screen for replying to emails, so you can think and compose without the visual clutter common to so many other services.”
“Which is not to say Hey is perfect or even that it fully solves the problems I’m describing. Its search is far inferior to Google’s. It’s too hard to rediscover mail that I’ve viewed but took no action on. There’s no way of sorting different kinds of mail that come from the same address. It has trouble threading long conversations with many, many participants. I miss the easy integration with all the other Google products I need to use.”
“But for me, for now, the friction is what I’m looking for. I am grateful — genuinely — for what Google and Apple and others did to make digital life easy over the past two decades. But too much ease carries a cost. I was lulled into the belief that I didn’t have to make decisions. Now my digital life is a series of monuments to the cost of combining maximal storage with minimal intention.”
“I have thousands of photos of my children but few that I’ve set aside to revisit. I have records of virtually every text I’ve sent since I was in college but no idea how to find the ones that meant something.” READ MORE
PRIVATE EQUITY
Justin Ishbia and Shore Capital Partners are looking for Joe Schmo on Main Street: “Ishbia and his team have acquired more than 1,000 mom-and-pop shops across the country (average cost: $15 million) since Shore’s 2009 founding and rolled them up into 61 larger chains of things including autism treatment clinics, bakeries, and exterminators. ‘We’re buying businesses in Akron, Ohio, and Pittsburgh, and Birmingham, Alabama,’ Ishbia says. ‘There’s more low-hanging fruit for me. It’s Joe Schmo on Main Street.’ Shore then invests in computer systems and equipment, stacks the businesses’ boards with industry veterans and hunts for complementary companies in adjacent markets.”
“‘We’re just buying and buying and buying,’ says Ishbia, who insists Shore doesn’t take on as much debt as other private equity firms and doesn’t cut services or head count. ‘The private equity world gets a bad rap for buy this, slash that. We are growth—we have almost 35,000 employees and hire thousands per year.’”
“While critics say private equity hurts consumers by reducing competition and quality and raising prices, Ishbia dismisses the idea. ‘It’s not like there’s just one PE-owned company in veterinary or dental or urgent care.’ He first learned about private equity as a teenager from his best friend’s father, who worked in the industry. ‘I just knew my buddy had a big house,’ he recalls. ‘At the end of the summer, I asked him, How do I pursue that career?’”
“Shore remains a minnow in the ocean of private equity—where the largest fish, such as Apollo, Blackstone and KKR, oversee more than $500 billion apiece. That’s by design. ‘We’ve turned away billions of dollars,’ Ishbia says. ‘In private equity, when you’re good at your job, you raise a bigger fund. My thesis was, Who stays in microcap? The answer is basically nobody.’” READ MORE
Thanks for reading, everyone. — Loren